A startup is seeking approval to sell alcohol in tiny inconspicuous packets. But the science is decades old

Palcohol—a new form of powderized alcohol—has gotten plenty of buzz (albeit perhaps not the kind it intended) from both fans and a number of alarmed scientists, politicians and parents after its label was temporarily approved by the U.S. Alcohol and Tobacco Tax and Trade Bureau.

The product won't land on our shelves just yet (the product's application has been withdrawn, temporarily, because of an "error," manufacturer Lipsmark says). But either way, it turns out that despite the buzz, powderized alcohol isn't exactly new, though for what it's worth, Palcohol's product has made it farther than any other we can trace.

The technology dates as far back as the 1970s, when Japan’s Sato Foods Industries began selling encapsulated alcohol as an additive in food processing.

Lipsmark won’t discuss how its product is made, but the process typically involves suspending ethanol molecules inside a host sugar molecule—different than the freeze dried beer products, which are non-alcoholic, that have appeared on the market.

The motive, in Sato Food Industries’ case, was to use the powder on certain food products like fish and meat in order to mask the foods’ odor and also help retain their natural juices, keeping them tender, according to Sato Foods' website.

But, of course, other companies went after the technique for other side effects of alcohol—namely, getting a buzz. Whether mixed up in a drink or simply eaten, the powder has the same effect in humans as consuming alcohol through a glass of beer or wine.

Efforts to bring the intoxicating dust to the U.S. market began as far back as 1974, when General Foods Corporation filed a patent for an "alcohol-containing dextrin powder." The inventors, like their Japanese counterparts, said their goal was in part to create a powder used to enhance food, namely, its flavor. But they also wanted to lay their claim on “a high ethanol-containing powder which can be used as a base for alcoholic beverages."

General Foods’ patented powder never materialized as sellable product. But in recent years, startups in Germany, the Netherlands and the U.S. have reportedly perfected their own consumer-ready formulations.

In 2005, an alcoholic powder product called Subyou emerged in Germany, at first online but soon for sale at gas stations, convenience stores and bars. Priced at $2 to $3 each, the product contained 4.8 percent dry alcohol—the equivalent of one and a half servings of liquor, according to news reports. The early success, though didn’t stick; Subyou disappeared, and its website, subyou.de, has since been taken down.

Two years later, in 2007, five Dutch students from Helicon Vocational Institute invented Booz2Go as part of a school project and began to look for manufacturers, according to a report by Reuters. A spokesman for the Netherland's Ministry of Health, Welfare and Sport said at the time that officials wouldn't prevent the product from entering the market, according to the Dutch Newspaper Het Parool, but seven years later, a commercial version has yet to be spotted.

As recently as 2010, a small company called Pulver Spirits sought the TBB's approval to market an alcohol powder, but decided "the regulatory hurdles were just too high at the time," Forture Magazine reported in an article that detailed company co-founder Anthony Trujillo attempts to bring the product to shelves.

The first step, he [Trujillo] said, would be to get past the Alcohol and Tobacco Tax and Trade Bureau, an arm of the Treasury Department that regulates alcohol makers for tax purposes only (at least ostensibly). Alcohol products must adhere to closely scrutinized standards of labeling, packaging, and formulation. Although the bureau, which was part of the Bureau of Alcohol, Tobacco, and Firearms before that agency's enforcement division was moved to the Justice Department in 2003, doesn't approve or deny products based on health considerations or propriety, it can use its power to effectively deny problematic products. "That's where the hell can be," Trujillo said... And once past that bureau, a producer has 50 state governments to contend with.

In April, Lipsmark sought approval for Palcohol, a pocket-sized sealed pouch it claims can, when mixed with water, create a variety of cocktails instantly. It can also be sprinkled on foods like hamburgers and salads for an added "kick."

The product, if it’s approved, will be made from either Puerto Rican rum or vodka. It will come in six flavors, each of them designed to produce drinks with about 10 to 12 percent alcohol, or roughly twice as much as a glass of many of America’s mass-produced beers.

And while the ring-shaped cyclodextrin molecules normally used to store the alcohol content can be found in prescription drugs and are generally considered safe, according to University of Sydney pharmaceutical chemist Nial Wheate, the Arizona startup hasn’t escaped widespread concern.

One of the largest: the fact that granulized alcohol can be snorted. Wheate says consuming the product in this way can have more severe consequences than drinking alcohol in a glass of beer or wine, because compounds are delivered straight to the brain in stronger doses.

"We don't know what the real risk of using alcohol in this way would be, as the research hasn’t been undertaken," he writes at The Conversation, "but as a worse-case scenario the alcohol may significantly impair judgment and motor skills at levels far below those which normally give this effect."

Regulators, such as Vermont Liquor Control director Bill Goggins, are particularly worried about the inconspicuous manner in which Palcohol can be sprinkled onto food or smuggled into restricted venues such as movie theaters and sporting events, making the product especially attractive to underaged teenagers, he tells WPTZ TV.

For its part, the company says it has taken steps to discourage any potential misuse, such as increasing the volume of non-alcoholic sugars so that it would take more than a half of a cup of powder to snort an entire drink's worth of alcohol and warning potential buyers through their website to use the product responsibly.

"We will do our best to inform the public about responsible and legal use of our product," Barbour says. "We believe Palcohol is not likely to be abused more than liquid alcohol."

Still, beverage industry attorney Robert C. Lehrman, who broke the news about Palcohol's TTB certification on his blog, thinks that the makers will have an uphill battle against competing beverage companies, state regulators as well as retailers who may be a tad bit reluctant.

"What remains is the concealability and portability is on steroids," he tells CBS News.

On April 8, the U.S. Alcohol and Tobacco Tax and Trade Bureau approved Palcohol's packaging label, a surprising move that tiggered a wave of criticism on the dangers of crystallized mooch.

The company, which says on its website that it withdrew its application due to a mistake on the label that incorrectly reflected the amount of powder in each packet, plans to correct the mix-up and re-submit its application.

In a statement, Lipsmark also highlighted the other possible uses of a powdered alcohol substance in the meidcal, manufacturing and energy fields.

"We've had medical personnel contact us about using Palcohol as an antiseptic, especially in remote locations where weight and bulk make it difficult to transport supplies," the company wrote.

It could also someday be used as a fuel source for camping stoves or even vehicles, the company says.

But the product already faces renewed scrutiny: Minnesota state representative Joe Atkins has already introduced a proposal to ban sales of powdered alcohol within the state; the Vermont legislature is discussing a similar bill. Just recently, Senator Chuck Schumer (D, N.Y.) asked the Food and Drug Administration for a ban on the substance.

If its application succeeds, Palcohol could be the product that finally makes it. If it fails, the product will likely join the ranks of the almost-to-market attempts before it—though if history is any indication, someone else is bound to give the concept a shot.

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About Tuan C. Nguyen

Tuan C. Nguyen is a Silicon Valley-based journalist specializing in technology, health, design and innovation. His work has appeared in ABCNews.com, NBCNews.com, FoxNews.com, CBS' SmartPlanet and LiveScience.